Risky Business
An Insider's Account of the Disaster at Lloyd's of London
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- £8.99
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- £8.99
Publisher Description
In this fascinating insider’s account, an American woman who became an investor alleges that irresponsibility, incompetence, greed, and fraud at Lloyd’s, the world’s most glamorous insurance enterprise, have caused the company to lose $12 billion in the last ten years.
Lloyd’s of London is not simply an insurance company; it is a society comprising thirty thousand Names (roughly 10 percent of whom are Americans)—private individuals like Elizabeth Luessenhop who accepted the risk of unlimited liability and pledged all their wealth to backing the insurance policies written by Lloyd’s. The beauty was that the Names didn’t have to put up any money to receive their profit share. As long as the premium calculations were sound, everybody prospered. But the 1980s were bad years for Lloyd’s—and for the Names who backed its business. It was also a time when the Society of Names grew by 50 percent to cover the disastrous losses the company was beginning to incur.
Risky Business, written with veteran financial writer Martin Mayer, is a detailed account of how the mismanagement of Lloyd’s has affected thousands of American investors who, like Luessenhop, sought low-risk, long-term security. Luessenhop and Mayer take us inside a unique business institution and show us that the ramifications of a possible Lloyd’s failure will be severe—and felt worldwide.
PUBLISHERS WEEKLY
That a British institution as venerable as Lloyd's of London could face financial ruin was unthinkable. Yet the unthinkable came to pass, and the authors explain how and why in engrossing prose. After describing the rich history of the organization that insured the commerce of the British Empire and, later, the world, and explaining its unique structure, they document the factors that caused a $10 billion-plus financial disaster. External causes included American courts' expanding liability (e.g., in asbestos and oil spill cases). These combined with internal factors such as Lloyd's investors placing blind trust in the company's underwriters and accepting risks in return for the prestige and tax breaks of being ``Names'' (private individuals who pledged their wealth to back Lloyd's policies without having to put up money to get their profit share). This accessible book is for those with an interest in modern English history or the insurance industry. This is Luessenhop's first book; Mayer (Nightmare on Wall Street) is a financial writer.
